opperation managerment

Essay by manhhungeib May 2014

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#1 on page 17 of the textbook

This is report of team number 6. These are our team members:

1. LY NAM HUNG

2. NGUYEN THI HONG LIEN

3. LE MANH HUNG

4. MAI THI TUYET ANH

The three types of financial management decisions:

 Capital budgeting: is defined as making a plan and managing investments of

the firm in long term.

Example of a business transaction that would be relevant to this decision:

The ABC bakery company established in Vietnam for many years and now,

ABC bakery company decides to expand their market to South East Asian

countries.

 Capital structure: this decision is used to finance the firm operation by

specific mixture of long-term debt and equity.

Example of a business transaction that would be relevant to this decision:

The financial manager of ABC bakery company mentioned above decided to

raise more $150,000 in South East Asian countries expansion, in which

$50,000 borrowed from the bank and $100,000 from creditors.

Debt

Creditors

$50,000

$ 100,000

 Working capital management: concern in short term assets to ensure

sufficient resources for the firm uninterrupted operation.

Example of a business transaction that would be relevant to this decision:

To make more products in expansion planning, financial manager decided

that material will be purchase on credit instead of borrowing in short term

form the bank.

#2 on page 17 of the textbook

The four primary disadvantages of sole proprietorship and partnership:

1- The liability of the owner for business debt is unlimited

2- Business income is considered as personal income

3- Life of proprietorship or partnership depends on owner life. The owner

use their own wealth to raise money as firm equity.

4- It is difficult to transfer ownership to other.

There are benefits to these types of business organization as...